Indian Rupee Briefly Breaches 85/USD, Hits 2025 High Amid Geopolitical Tensions and Market Volatility
The Indian rupee reached a 2025 peak of 84.78 per U.S. dollar before retreating amid India-Pakistan tensions and market volatility. Factors include foreign inflows, exporter hedging, and a softer dollar.
Mumbai, April 30, 2025: The Indian rupee experienced significant volatility on Tuesday, briefly appreciating to a 2025 high of 84.78 against the U.S. dollar before retreating amid escalating geopolitical tensions and market fluctuations.
The initial surge in the rupee was attributed to robust foreign portfolio inflows into Indian equities, increased hedging activities by exporters, and a softer U.S. dollar influenced by weak economic indicators. However, the currency's gains were short-lived as concerns over rising tensions between India and Pakistan, following a recent militant attack in Kashmir, led to heightened market anxiety.
The Reserve Bank of India (RBI) is believed to have intervened in the forex market to curb excessive volatility, with traders noting possible dollar sales around the 85.38 level to stabilize the rupee.
Analysts suggest that while the rupee's appreciation reflects underlying economic strength and investor confidence, the currency remains susceptible to geopolitical developments. The interplay between market fundamentals and external tensions will likely continue to influence the rupee's trajectory in the near term.
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